Comprehensive Insurance

When you finance the purchase of your motor vehicle, it is usually a requirement of the loan contract to have the security comprehensively insured at all times during the contract term. As a consequence, you must organise insurance before delivery of the car by transferring your current insurance or organising new cover. National Capital Finance is able to provide a competitive insurance quote which may streamline the process for you.

In general, Comprehensive insurance provides cover for:

• Accidental Loss or Damage to the insured vehicle up to an agreed value (ie. a set amount the insurer agrees to with the insured) or market value (ie. the cost to replace the vehicle with a vehicle of the same make, model, age and condition immediately prior to the loss or damage). Today, most comprehensive policies are market value policies.
• Your legal liability for damage to another person’s property as a result of an accident which is your fault up to a predefined limit for each event (including certain legal defence costs),
• A number of other additional benefits which are automatically incorporated into the policy such as towing costs, replacement vehicle cover, emergency travel & accommodation costs, personal property.
• Certain optional covers (where agreed) such as removal of basic excess for windscreen claims, protected no claim bonus and restricted driver cover.

Benefits of Comprehensive Insurance

• Protects your finances in the event your vehicle is damaged, involved in an accident, or stolen.
• Comprehensive Insurance can be easily financed into most loans.
• Comprehensive Insurance is fully transferable.
• Comprehensive Insurance needs to be renewed every twelve months so it provides you with the opportunity to shop around for the best quote.
• Some comprehensive insurance policies also provide additional benefits should you need to claim.
• Comprehensive Insurance can be cancelled and the premium rebated on a pro-rata basis.
• The cost of comprehensive insurance is largely rated based on your driving history.

Loan Protection

• Loan Protection or Consumer Credit Insurance protects you, as the borrower, in the advent of accident, sickness, involuntary unemployment, or death. If you are unable to work due to accident, sickness or involuntary unemployment, CCI insurance will cover your loan repayments for a stated period of time or until you are able to return to work. In the advent of death, the credit contract may be repaid in full.
• The Consumer Credit Code regulates the conduct of authorised representatives selling Consumer Credit Insurance. Under the Credit Code; 
  • you cannot be forced to take out CCI insurance,
  • you cannot be forced to take out CCI insurance with a particular insurer,
  • a copy of the CCI policy must be provided by the insurer within 14 days after the acceptance of the proposal.
  • if you terminate your loan, any CCI insurance is also automatically terminated by the lender and a statutory amount refunded to you as a reduction in the amount you must pay to finalise the loan.

Benefits of Consumer Credit Insurance (CCI) 

• Protects your finances in the event of accident, sickness, involuntary unemployment, or death.
• CCI can be easily financed into most loan contracts.
• A CCI policy can be tailor made to accommodate the areas that you feel most at risk.
• Offers financial security in the event of the unfortunate occurring.
  • In the event of Death, the typical life component will pay the outstanding balance of the credit contract up to a specified maximum value.
  • In the event of Disablement, the typical disability component will pay the lesser of the regular monthly loan repayment for the period of disability up to a specified limit.
  • In the event of involuntary unemployment, the typical unemployment component will pay the lesser of the regular monthly loan repayments for 90 days or a designated maximum value per claim. There is also usually a cap on the maximum benefit payable for the entire period of the policy.
• You only pay for the portion of the cover you use as it is automatically rebated when the loan is repaid in full.

Shortfall Insurance (Gap Insurance)

Shortfall Insurance protects you as a borrower by paying the shortfall amount to the credit provider or bank if, in the event that you have a total loss due to accident, theft or damage, and the amount received from the comprehensive insurer is inadequate to finalise the loan on the vehicle. When you borrow money to purchase a vehicle you may be exposed to an insurance shortfall gap. This gap is the difference between the insured value of the vehicle and the pay out to the lender. For most vehicles purchased, the maximum exposure to this gap will occur from the date of purchase to around the 2nd or 3rd year through a standard loan of 60 months. Such a gap exists because, in most cases, you initially borrow more than the vehicle’s market value (Registration cost, stamp duty, dealer delivery charges, comprehensive insurance etc) and the value of the vehicle falls relatively faster than the principal balance of the loan in the initial period of the loans term.Sometimes the quantum of this gap can run into many thousands so it’s important you consider this product to ensure you are adequately protected. You can only purchase Gap Insurance when you enter into a new finance contract at the time of a vehicle purchase and the vehicle must be comprehensively insured.

Benefits of Security Shortfall Insurance (Gap Insurance)

• Protects your finances and credit rating in the event their vehicle is declared a total loss due to theft or accident.
• Gap Insurance can be easily financed into most loans.
• You can purchase Gap Insurance independently of your current comprehensive insurer
• Most GAP insurance policies also compensate you with an additional cash benefit

Motor Vehicle Warranty
Motor vehicle warranty insurance is an insurance policy designed to minimise the cost to you of replacing or repairing motor vehicle parts in the event that they are faulty or damaged, subject to specific limits. If a vehicle meets certain qualifying criteria, a vehicle warranty can be purchased for various periods ranging from 6 months to 36 months. In some cases, a warranty may be purchased prior to the expiry of the manufacturers extended warranty so that the customer maintains continuity in their protection. Most warranties require that the vehicle is regularly serviced and maintained as required by the manufacturer, and if a part needs replacing or repairing it can generally be done anywhere in Australia.The specific items and benefits covered by a vehicle warranty can vary dramatically so it is important that you review the policy wordings carefully or seeks independent advice. Where National Capital Finance sells a warranty on behalf of a warranty provider, the warranty is fully underwritten as it is deemed to be a financial product under the Corporations Act 2001.

In some instances dealers will sell a non-underwritten warranty, generally known as a Service Contract. Services Contracts can only be sold to you by the dealer or owner of the vehicle as part of a contract of sale and must only cover the costs resulting from the breakdown of the vehicle or its parts, otherwise it may be deemed an insurance product. Under the FSRA legislation, a third party, such as National Capital Finance, is not to sell or finance a Service Contract, even if it may indicate some form of insurance underwriting.

Benefits of a Vehicle Warranty

• Protects the borrower’s finances in the event of faulty or damaged motor vehicle parts, particularly with the average cost of repair increasing.
  Offers financial security in the event of the unfortunate occurring.
• Fully underwritten warranties can be separately financed into most loan contracts.
• The wide range of warranties allows a customer to select the level of cover they are comfortable with.
• The customer’s vehicle remains covered even if the finance contract is finalised.
• Additional items such as towing costs, car hire and accommodation are often included.
• Most warranties permit the transfer of ownership for a small fee, subject to advising the administrator.
• The vehicle remains in good condition as warranties require the regularly service of the vehicle.
• Log books are kept up to date which improves the saleability of the vehicle.
• Warranty products can be cancelled and the premium rebated on a pro-rata basis so the customer only pays for the portion of the cover at risk while his policy is current.

Insurance Products
For your convenience and information, we have provided an outline of the common auto and credit insurance products you are likely to encounter whilst financing the purchase of your motor vehicle. National Capital Finance is authorised arrange insurance on behalf of a number licensed insurers as outlined in the relevant Financial Services Guide for the State where you reside. It is important that you read the relevant Financial Services Guide and Product Disclosure Statement and understand the product features and benefits of each type of insurance cover.

It is important to note:

• you cannot be forced to take out any type of insurance (however, evidence of current motor vehicle insurance is required by most credit providers),
• you cannot be forced to take out insurance with a particular insurer,
• details of the commission and benefits that we may receive as result of providing you with insurance are detailed in the relevant Financial Services Guide and, where applicable, on the loan contract,
• if you have any queries or a complaint about an insurance product you should follow the Complaint Handling procedures detailed in each Product Disclosure Statement.